The Legislative body of Taiwan has approved a set of amendments that have effectively banned anonymous cryptocurrency transactions on the insular country. While Taiwan passes anti money laundering amendments, the exchanges will have to adapt to this set of new rules. Banks have been given a strict set of rules, and also punitive penalty fees have been accorded.
Taiwan Passes Anti Money Laundering Amendments
Taiwan Passes Anti Money Laundering Amendments that will supposedly help the country to curb money laundering when transaction with cryptocurrencies. The legislation dictates an amended new set of rules for transactions that clearly specify that every part of a transaction in the country must be identified.
Because of this, the law now states that cryptocurrency exchanges and other business and institutions that use crypto as currency will need to establish real name KYC policies in order to keep operating in a normal fashion.
Before, peoples could use a pseudonym or fake name to make cryptocurrency transactions without having to indentify themselves. This will surely take some time to implement, but it will give more legitimacy and trust to the industry.
Consequences and Considerations
If some exchange refuses to implement this identification policy, banks are obliged to not serve them and to report them to the maximum financial authority on the country, the Financial Supervisory Commission (FSC). With this move, Taiwan modernizes its regulation and is getting closer to the worldwide set of standards towards cryptocurrencies, according to the ministry of justice.
The ministry of justice has declared that compliance makes the idea of dealing and trading cryptocurrency a lot more interesting and easy. In their own words:
A compliance culture and mindset is an important part of effectively fighting money laundering, and that culture and mindset can only be fostered through good habits and practices
The law has been amended before, but it still seems this has not helped too much to curb these kinds of crimes in the past. A new system of penalty fees was accorded, and people will have to pay more than 50,000 yuan if the one making the transaction is a non-financial institution, and more than 500,000 yuan if the transgressor is a financial institution. Finally, this rule will only apply when changing cryptocurrency for fiat money, so pure cryptocurrency exchanges won’t have problems.
Done Before, But Not Quite Well
This type of focus has been tried before in Korea, with little success: the people are required to turn his real name to exchanges, but there is no legal framework that can help exchanges and cryptocurrency startups enforce this rule. The real adoption of this system is quite low if done voluntarily.
In the meantime, Taiwan is also expecting to issue laws over ICO and other cryptocurrency related activities.